Crediting what it called ‘effective management’ of delinquent loan accounts that slashed loan loss provisions nearly in half, Commonwealth Bank today reported it closed the fiscal year ending December 31 as the third best year in its 53-year history.
Year-over year, there was a 42% increase in profit, some $15 million higher than the $36 million in total profit reported in 2012. Total assets remained virtually unchanged at $1.43 billion. Meanwhile, return on equity stood at 23.5% with shareholders earning $0.47 per share while return on assets was 3.16%. All of these figures compare favourably with the prior year when return on equity was almost 30% less at 16.5%, return on assets was 2.06% and earnings per share were $0.31.
“Our good performance comes from the financial strength and consistent application of the bank’s business model that is focused on personal banking for Bahamians, and has been in place for more than 50 years,” said Mr. Sands. That focus on personal banking services combined with conservative banking practices produced regulatory capital of 26.3%, up from 24.8% last year and well above The Central Bank’s requirement of 17%. The Bank’s liquidity ratio was 32%, also well above the required 20%.
Most impressive and equally or more important for long-term predictions of security, was the Bank’s allowance for non-performing loans at 124.5% of total non-performing loans, compared to the industry average coverage of 45.8%. The Bank also produced an efficiency ratio of 45.66% reflecting its ability to “accomplish more with less,” according to Mr. Sands.
Commonwealth Bank operates 11 branches in New Providence, Grand Bahama and Abaco and plans to re-open its expanded Oakes Field branch before the end of February.
